Crescent City/Del Norte County Real Estate Market Report - September 2010

The Crescent City/Del Norte County real estate market report for September is a reflection of the economy and nothing more. I'd like to remind all my clients that I do not have control over the economy but if I did, I would take a more hands-off approach than our government has and let nature take it course AND QUIT BAILING OUT BANKS. I think it's been firmly established that tact is not working and that banks are not passing on TARP money to their consumer's. Anyone who's tried to do a loan modification knows that is a true statement and that the loan mod. process is nothing but a joke.

So what happened in our market in September? Absolutely nothing much.

• 9 houses sold! versus 15 in 9/09, 15 in 9/08 and 25 in 9/07 (that's as far back as my MLS goes).
  
  
• The median priced home that sold was $79,000!, versus, 145k -9/09, 207k - 9/08, 200k - 9/07.
  
  
• 146 was the average days on market for 9/10, 179 for 9/09, 131 for 9/08 & 169 for 9/07.

Right now the Del Norte Board of REALTORS MLS has 285 active residential listings with a median price of $225,000 with an average DOM of 223 which is a big, WOW. That DOM of 223 is all the homes priced over 300,000 that are just not selling.

In fact:

• Only 11 homes out of the 137 homes that have sold so far this year sold for more than 300k and 45% of those were either short sales or foreclosures.
  
  
• To put it another way 8% of the homes sold this year sold for more than $300k and none have sold over $435k.
  
  
• However 32% of the active residential listings are priced above $300k and that's where the long DOM is coming from. So you have scads of upper-end inventory with an itsy-bitsy amount of sales. OUCH!
  
  
• This give us an absorption rate (the rate it would take to sell all current inventory divided by the current rate of sales) at 15 months. Another ouch!

What's it all mean when interest rates are in the 4% range and no one is buying homes, scuze me, 9 people did? I spoke with a escrow person earlier this month and was told they had more escrows cancel than opened in September in that particular office and in talking to real estate professionals in my market and in other markets around the country, what Del Norte County is experiencing is the norm rather than the exception.

Let's face it, our economy sucks, people are "strategically" walking away from their homes, our unemployment rate painted with lipstick is something like 14%, but the actual number is in the 20% range if not higher and banks do not want to loan money. Banks have enough foreclosures--sources I read that I trust say shadow inventory is 7 million and growing--so why loan money and have those folks "strategically" walk away next year if they lose equity? It's a viscous circle.

I'm leary of the "strategic" bandwagon though and think more folks should really think that through. My contrarian mindset says buy when everyone is selling and sell when everyone is buying. Now look at the folks who jumped on the bandwagon and bought in 2005 and 2006 (hate to say it, but I'm one of them, so much for my contrarian mindset) when banks were handing out money like it was toilet paper, used toilet paper, and got all these folks into homes (ensuring house payments for several years). Now everyone is saying the sky is falling, the sky is falling, so you strategically walk away from your home, the bank gets it back, in fact they now have 7 million homes they have hung onto so in all their goodness, they don't ruin our economy, as if they care, and prices stabilize and maybe even go back up. Wouldn't the banks now MAKE MONEY on your home! Be careful out there. This is one scenario I'd sure hate to see that happen.

I can honestly say I hate banks as of this moment. Why should they get to stack all our interest up front? Why can't our loans be simple interest? Who says it has to be done this way? Wouldn't it be nice if you could actually see your principle shrink more than $2000 when you've paid $36,000 in one year in house payments? Who says it has to be this way? Banks! They suck.

What are banks doing to help out? Loan mods, speedy short sale approvals?Hell, they don't even let you scan and email docs (all except GMAC and BofA) the rest can't be bothered to recognize technology has moved beyond a fax machine. How many agents have been disconnected or hung up on after sitting on hold for an hour or more? What about the guy in Florida who was foreclosed on and he didn't even have a loan? OK. Guess I've ranted enough. Somethings got to change, though and I hope everyone out there puts on their thinking cap when it comes to how to handle their home.

If you have an upper end home listed in Del Norte County right now--that constitutes anything above $250,000--you just need to hang in there and hope that an improvement in our economy and housing market comes soon. I wish I could give you better news or more encouragement. I am right in there with you with my upper-end home. Ain't life grand?